The vulnerability of the Xbox 360 to a hardware failure
known as the Red Ring of Death is a well publicized matter. Last summer, amidst
a flurry of reports from Xbox 360 owners, DailyTech exposed
retailers’ estimates that up to 33
percent of Xbox 360 consoles experience hardware failures within the first
year of ownership.

Electronics and appliances warranty company SquareTrade now
claims that it found a 16.4 percent normal-use failure rate on the Xbox 360.
The figure, if true, shows that Microsoft has steadily improved the reliability
of its console considerably – though still not up to the level of general
acceptability.

Microsoft chairman Bill Gates expressed earlier this year
his aim for the Xbox 360 to be the most
reliable console on the market. “We've got incredible reliability on the
new work we've done,” he said. “Our commitment is that it will be the most
reliable video game box out there. People really love the Xbox because of the
content, but we've got to make sure that the hardware never stands in the way
of that.”

According to SquareTrade, 60 percent of all Xbox 360 service
calls were about the Red Ring of Death, which Microsoft refers to as “three
flashing red lights.” In response to widespread reports of the console’s
susceptibility to that particular error, Microsoft extended
its warranty to cover the specific hardware failure for three years from
purchase.

The remaining 40 percent were composed to hard drive
failures, disc drive malfunctions, disc read errors and others. Such defects
are, however, are covered only by the console’s current one year warranty (which
the original report incorrectly states is 90-days).

In response to SquareTrade’s report, Microsoft spokesman Joe
DiMiero told IGN,
“Microsoft does not comment on hardware failure rates [emphasis by Microsoft],
nor do we comment on speculation. We have not seen the report, and are
unfamiliar with the agency that filed it. Based on the enthusiast community's
feedback yesterday, the methodology of this report is suspect.”

A supposed anonymous Microsoft insider blamed the Xbox 360’s
fragility on the company’s initial negligence
on quality assurance, saying that the project was “under resourced” in test,
quality, manufacturing, and supplier management. “There just weren't enough
people to do the job that needed to be done. The leadership in many of those
areas was also lopsided in essential skills and experience. But I hear they are
really trying to staff up now based on what has happened, and how cheap staff
is compared to a couple of billion in cost of quality,” the source wrote
in an email.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer